When seeking project approval, submissions should propose and provide a rationale for the delegations and controls, consistent with the risk profile, the business case and the governance arrangements for the relevant project, delivery entity and owner. |
The allocation of contingency (and corresponding risk ownership) to the governance authority best placed to manage and control the risk is crucial to maximising project cost performance. In allocating contingency, there needs to be a level of delegation and control that aligns incentives at project delivery level and minimises the drawdown of contingency through robust risk management.
Contingency provisions are made only for the realisation of risks and are allowances made for changes in the project scope or for risks captured within the project Base Cost Estimate.